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Hibiscus upbeat on North Sabah oil prospects
Published on: Wednesday, December 06, 2017

Kuala Lumpur: Hibiscus Petroleum Bhd is upbeat on the long-term prospects of the 2011 North Sabah enhanced oil recovery production-sharing contract, says Managing Director Dr Kenneth Pereira.

"North Sabah, when we complete the acquisition, will no doubt be a step changer because the field provides long-term production rights until 2040," he told reporters after the company's annual general meeting here Tuesday.

Pereira also said the company received unconditional consent from Petronas Carigali Sdn Bhd for its indirect wholly-owned unit, SEA Hibiscus Sdn Bhd, to acquire 50 per cent participating interest in North Sabah from Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd.

The production sharing contract (PSC) comprised four producing oil fields and associated infrastructure, namely, St Joseph, South Furious, SF30 and Barton oil fields, as well as, pipeline infrastructure and the Labuan Crude Oil Terminal.

Total oil production averaged approximately 18,000 barrels per day in 2015.

Currently, Hibiscus Petroleum's main operating asset is a 50 per cent-stake in the Anasuria Cluster, a concession in the North Sea off the United Kingdom, which was acquired in March 2016.

Pereira said the company is not eyeing any specific acquisitions currently given that Anasuria and North Sabah, once completed, would keep the company busy.

On outlook, he said Hibiscus Petroleum expects an encouraging year given the higher oil price of US$63.21 per barrel, as at end-November.

"We have been profitable even during the oil price range of between US$45 and US$51 per barrel.

"If the Organisation of Petroleum Exporting Countries' (OPEC) intervention keeps oil prices above US$58 to US$60 per barrel, then it should be an encouraging year as long as we manage our cost and keep production volume up," he added.

Meanwhile, Chairman Zainul Rahim Mohd Zain said the company projected oil prices to range between US$55 and US$65 per barrel in the near-term.

When asked on the company's dividend policy, Zainul said it had no plans for a dividend payout in the short-term because any profits would have to be reinvested to grow the business.

"This is a capital-intensive business and we will pay dividends to our shareholders when we can afford it," he added.

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